Owing to industry needs, different types of blockchain networks have evolved till now. These networks have the same functionalities to speed up complex processes such as funds transfer but follow different working principles.
Why need to have different types of blockchain networks?
The basic application of blockchain technology is to perform transactions and store all the information related to transactions securely. But the usage of blockchain networks varies in multiple cases. For example, Bitcoin works around distributed ledger with blockchain technology. It is a public network that is accessible to all the people around the globe.
A private blockchain is another type of blockchain network that is restricted, and only authorized people can access network information. For example, a bank is based on a public blockchain, no people outside the network can gain access to bank data. The private network is limited, and the network administrator monitors the authorized nodes. If someone wants to make an entry into a private network, he needs admin permission. In other words, companies can scale their blockchain network by allowing limited people to join the application.
Multiple industries have different requirements like controlling authorization or building a community around. To cope up with these challenges, blockchain experts have developed blockchain networks having different accessibility levels.
Types of Blockchain Network
A public blockchain is accessible to the public without any limitations in terms of validation and participants. As no central authority has control over this network, a single individual cannot manipulate a network that makes stored data immutable.
Public blockchain networks are completely decentralized, and each node has the same authority to control the network. The most famous cryptocurrencies like Bitcoin, Litecoin, and Ethereum use public networks.
A private blockchain is restrictive; only authorized people can access this. The authorities have the power to choose entities and blockchain developer all them permission during the development phase.
After launching, the network administrator is responsible to allow access to new users or revoke access to existing users. Private companies utilize these types of a blockchain networks to keep sensitive data.
A semi-decentralized network where multiple entities operate. In this network, several entities have access to the network to view and share information. Banks, large organizations, and government institutes use consortiums to carry out their daily transactions.
A hybrid blockchain network possesses properties of both private and public blockchains. It provides versatile nodes where individuals can set preferences to share or discreet data.
Public blockchain networks are very useful to conduct secure, transparent, and reliable voting processes at the organizational or national level. They play a critical role in supervising crowdfunding activities. On the other hand, private blockchain networks cope up with the challenges of the supply chain by making the process transparent, secure, and traceable. In addition to this, private networks make tracking and verification of asset ownership very easy that can be helpful in the real estate industry.
Consortium blockchain is playing critical roles in the financial sector by allowing banking groups to make transactions. The research department can also use consortium to store, analyze and share researched data. While Hybrid Blockchain can be useful for industries that are looking to improve their monitoring system.
Each blockchain network has unique features, and it depends upon you to select an appropriate blockchain network owing to your business needs. This article has covered up different types of blockchain networks and their usability. Still, you are facing any ambiguity! OptimusFox, a superior blockchain development company, can help you from consulting to integrating.